«

»

Apr 02

How Dennis Rodman Can Improve Your Discipline

When I was in high school I had a friend who decided she’d like to be blonde.

She had sort of medium brown hair, and was totally aiming for vixen.

Unfortunately for her she was the first one in our group to get her drivers licence and a proper job, and as such she was our designated driver and expected to provide us with ciggies and alcohol because she was rich.

Which resulted in her actually being quite poor.

So she did what any self-respecting 18-year-old with a blonde ambition does when there is no money for a hairdresser – she decided to take matters into her own hands, and use bleach.

Household bleach.

The goal - Cameron Diaz. The result - Dennis Rodman.

Needless to say, that girl was at the hairdresser at light speed and the result of her hideous error was fixed before we, her trusted friends, ever had a chance to point and laugh.

We All Make Mistakes

I made a mistake last week.

I know – it’s difficult to believe such a thing could happen, but there you go.

But last week I did make a mistake and just like my girlfriend, I did my best to make it go away.  Which makes sense and seems like the right thing to do – if you make a mistake, you fix it.  Easy.

But when you’re a trader – especially a day trader – correcting your mistakes can have unintentional consequences.

When you’re in a day trading environment, things are moving quickly.  You need to feel balanced and sure-footed.

Making an undisciplined error is bad for that – it unsettles you and throws you off your game.  It wreaks your focus.  But when you get straight back into the market to try and correct your error, you end up way over-correcting and in a huge psychological tail-spin.

One act of undisciplined behaviour has suddenly morphed into two, because your quick correction is undoubtably an off-the-cuff reaction.

When you’ve made a mistake, it is far better to acknowledge it, then carry on as if the trade was a valid one. This is not to say making the mistake was forgivable – it’s not.

But rather than trying to make things as though the mistake was never made, the mistake should be accepted and the correction made once the trade is closed.

So how do you correct a mistake after the trade is closed?

Easy.  You go forth and sin no more.  You write-up the trade, and you outline the error and the reasons you made it.

And, just like my friend will never tip Domestos on her head again, you have to resolve to never again make that same mistake.

So when you find yourself in a position where undisciplined behaviour is starting to creep into your trading, it’s time to stop.

Step back.

And move away from the bleach.

  • http://tradingsempergumby.wordpress.com redman59

    So true as in this expiration month of April for me. I killed a short on SHLD but unfortunately a mismanagement of the options strategy on my part created a more than necessary loss than was needed as I started to hope towards the end and the same for an AAPL trade that I got on a short but again mismanagement on my part created a bigger loss. The best I can do is learn from these as a plead for my money back will get me no where.

    The greatest thing about trading is that one is always learning and developing and continuously solidifying that mental strength to stay in the game.

  • http://lasxfx.wordpress.com Trader LA

    When I was younger it was “cool” to bleach these 2 long bits of hair that came down the front of your face. If you were cooler you would put pink fudge colour in it. Thinking back it makes me LOL. Looked dreadful!

    “You write-up the trade, and you outline the error and the reasons you made it”. Very good advice. I do this every night. Always figure out what you did wrong, learn from it and (try to) never make the mistake again.

    Lynette.